Market Wrap- 2008 Week 10

THE TAPE:
DOW: -373 (-3.03%)
S&P: -37 (-2.84%)
NASDAQ: -59 (-2.67)
RUSSELL: -26 (-3.73%)

THE STORY:
I hope everyone took my advice and had a nice relaxing weekend. I'll tell you what... curling is not so much relaxing but a big kick in the ass. I will have more on that in a later post.

I'll be quick.

Last week was exactly what we thought it was going to be. Hopefully, you were on board the short side of the market. I present the S&P:

Given that we still have some downside to go, I have found a few charts that could be interesting in the coming weeks.








And now time for the reality check. On the DOW, we have passed down below the very psychologically important 12k line. However, there is a lot of mess stacked up against us in the form of support. The next chart you will see is a 10 year chart on the DOW. I have drawn in a rather significant line with three points of interest. The first point is the peak of the tech bubble before one of the most magnificent bear markets we have ever had. The second point is the mid year peak in '06 when we failed to break the previous all time high (see point 1). The third point took place about 4 or 5 weeks ago when the world market had a serious breakdown and subsequent recovery all within a 48 hour time frame, a la Jackass and his emergency rate cut.

All this to say, we are drawing ever nearer to that line. In fact, for our short term triangle to be a success, we need to actually BREAK the line. I don't really know what to do about this other than wait. The point right now is awareness. Consider yourself informed.

This week, I would not be surprised if we consolidate a bit to the upside and then head south again. Be patient yet aggressive and kick some ass.